At the end of mission 5 (in the factory), you'll fight Hodge again, this time in a powered up suit with Pixie's powers. When he gets to about 1/3 health, he'll stop and talk with you. You will be given the option to either accept his surrender (side with the X-Men), or continue fighting (side with the Brotherhood).
Select either option and he will say his suit finished regenerating and then continue fighting him. You get the achievement when you finish him off.